The 2Q25 JBREC + CRE Daily Fear and Greed Index is now available, offering timely insights into investor sentiment in the commercial real estate (CRE) industry. This quarter’s report reveals a market cautiously leaning toward optimism, even as capital remains tight and policy headwinds persist.
The headline Fear and Greed Index edged up to 56 in Q2 2025, suggesting the commercial real estate market is entering a modest expansion phase.
Multifamily and industrial sectors led the rebound in sentiment, while office continues to trail due to persistent structural headwinds such as remote work and underutilized space.
Investor Activity Remains Muted
- 71% of investors reported holding their positions in Q2—the highest level in the survey’s history.
- Only 21% of industrial investors increased their exposure, a sharp drop from 35% in Q4 2024.
- While 66% expect to increase exposure in the next six months, current conditions still reflect a high degree of caution.
Asset Values Still Declining—But Stabilizing
Though valuations for office and multifamily remain down year-over-year—at -10% and -6%, respectively—the rate of decline is slowing. Retail was flat, and industrial valuations held steady, showing signs of resilience. Looking ahead, investor expectations for asset value growth have softened across all sectors.
Trade Tensions and Foreign Pullback Add Pressure
Policy uncertainty looms large. A majority (56%) of investors expect US trade policy changes to have a negative impact on CRE.
- Retail investors are especially pessimistic (64%), fearing higher import costs and weaker consumer spending.
- By contrast, 29% of industrial investors anticipate a net benefit, though most say meaningful impacts won’t materialize for another 18 months.
- 52% of investors say overseas players are reducing their exposure to US CRE, further tightening liquidity, especially in gateway markets.
Download the Full Survey Results
Lenders meticulously assess risk to determine how much financing makes sense for a property venture. Getting the loan amount right matters – overextend, and the deal can crumble.
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